Neighboring Fairfax County’s board of supervisors and school board got some gloomy forecasts for the coming fiscal year at a joint meeting they held last week based mostly on a slowdown of the real estate market. It can be assumed that their City of Falls Church counterparts will be getting a similar projection when they meet together this coming Monday for the unofficial kickoff to the next six months of budget hammerings.
However, it is hard to feel too gloomy about the coming year when the F.C. City Council just this week voted unanimously to spend an almost $6 million extra (a significant number for Falls Church with its annual operating budget just over $100 million) in the form of budget surplus and use of federal Covid relief funds.
Among other things, this has enabled the City to go without having to incur a penny of new debt to get through all its obligations for the second year in a row.
Falls Church’s chief financial officer Kiran Bawa did signal to the Council this Monday that projections for the coming year, given a decline in real estate values where that is such a critical component of this local economy, will test the creative talents on the Council going forward.
It is doubtful a continued decline in the tax rate, down over the last two years from $1.355 to $1.23 per $100 of assessed valuations, can continue.
After receiving Bawa’s revenue projections this coming Monday, the Council is expected to provide budget “guidance” to all departments of the City government and schools that will craft their budgets for the coming fiscal year at its final meeting of the year on Dec. 12.
Anticipating a forecast next week that will be fairly in line with what neighboring Fairfax County is facing, City officials are keenly aware that the forecast presented to the county last week included early estimates of available revenues based on current information, with projections based on existing tax rates. A rapidly changing real estate market is impacting assessment growth, the Fairfax lawmakers were told.
While it was suggested that focus should be on continued investments in employee salaries as recruitment and retention issues remain, that would lead to limited flexibility for other priorities.
The revenue outlook for the coming year will not be fully known before official annual real estate assessments are released in early February 2023, so next week’s session will be built around considerable guesswork, if educated.
The City will include in its revenue column $1,873,091 in carryover dollars from the surplus and federal American Rescue Plan Act (ARPA) funds left over after $5,848,773 was OK’d to be spent out of that pool earlier this week.
The money approved by the Council for expenditure this week was exactly as recommended by City Manager Wyatt Shields, with almost no modifications. It included ARPA money totaling $2,999,364 of which all but $973,091 was authorized for spending, a budget surplus of $1,599,409, all but $900,000 of which was OK’d to be spent. Underspending in the last fiscal year of $805,000 was included in the surplus number.
So, the Council OK’d the following uses for the $5,848,773 in new spending this week:
A transfer to the schools of $1.165,000 in the spirit of the revenue sharing arrangement between the City operations and schools.
A workforce investment of $873,000, being one-time bonuses for all employees in recognition of the extraordinary circumstances of the Covid pandemic (totaling $275,000), IT equipment replacement totaling $165,000, vehicle replacement of $200,000, professional development initiatives of $100,000 and more.
Transportation and public safety expenses of $972,000 and $445,000 respectively to provide for safer streets, sidewalks and neighborhoods, including $425,000 for W&OD Trail improvements, $250,000 for traffic signals, $150,000 for brick pavement maintenance and $147,000 for pedestrian and bike safety.
“Small town character” enhancement expenses of $953,609 will go to acquisition and development of three proposed “parklets” in the S. Washington area, with money for holiday lighting, public art and next August’s 75th anniversary celebration.
“Social sustainability” expenses authorized include $922,159 to the Affordable Housing Strike Fund, and capital improvement projects funded by cash in lieu of new debt, totaling $450,000 for new fire station doors, $200,000 for IT infrastructure and $150,000 for park improvements.
While the Council received little outside input on the use of the surpluses, multiple suggestions on the use of funds for communications outreach, including utilizing the Falls Church News-Press, by Council members Phil Duncan and David Snyder did not result in any modifications of the proposals presented by Shields.